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FTSE breaks through 6,000 as banks drive relief rally
FTSE 100 rallies as Lloyds dividends drive jump in bank stocks while insurer RSA surges after weathering storms to post impressive profits.
Update: The FTSE 100 has broken through the 6,000 mark as a rally in banks following Lloyds' hike to dividend payments injected relief among investors.
The UK blue-chip index rose 138 points, or 2.4%, to 6,006, with Lloyds (LLOY) among the biggest risers, up 12.6% at 70p, after unveiling a full-year dividend payout of 2.75p, including a 0.5p 'special'.
That helped drive a recovery in banking stocks, with Royal Bank of Scotland (RBS) up 5.1% at 244p, Barclays (BARC) 4.6% higher at 164p, HSBC (HSBA) rising 3.2% to 447.7p and Standard Chartered (STAN) rising 2.4% at 398.6p.
Lloyds was joined at the top of the index by insurance group RSA (RSA), up 9.6% at 432.5p after posting better-than-expected results despite costs from the series of storms which battered the UK and Ireland over the winter.
The group reported profits of £523 million for 2015, well ahead of the £481 million analysts had expected, despite shouldering a £76 million hit from storm claims. The insurer also reported solid progress on its efforts to cut costs, with £250 million expected to be saved in 2016, a year ahead of schedule.
Merlin Entertainments (MERL) was another strong riser, up 3.8% at 451.3p after reporting full-year profits of £291 million, despite the impact of the Alton Towers rollercoaster crash last year.
'2015 was a difficult year for the group, after a terrible rollercoaster accident at Alton Towers. but trading bounced back by the end of the year,' said Steve Clayton, head of equity research at Hargreaves Lansdown. 'The longer term prospects for the business look very good.'
Oil stocks were also in the ascendancy, after the price of Brent crude steadied around the $34 mark, down on the day but up from the previous session. Shell (RDSb) was up 2.9% at £15.93 and BP (BP) rose 1.8% to 340.8p.
Almost all stocks in the FTSE 100 made gains amid a broad-based rally. Among the few fallers were Capita (CPI), down 4.9% at £10.19 and at their lowest level in two years after the outsourcing group reported a lower pipeline of work it was bidding for.
But rival Serco (SRP) was a strong riser, up 15.1% at 94p and topping the FTSE 250, on hopes of a turnaround after posting better-than-expected profits.
National Express (NEX) was another strong 'mid cap' riser, up 10.2% at 325.4p as the transport group's overseas operations helped it steal a march on rivals and post a 15.5% rise in 2015 profits.
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- Lloyds Banking Group PLC (LLOY.L)
- Royal Bank of Scotland Group PLC (RBS.L)
- HSBC Holdings PLC (HSBA.L)
- Standard Chartered PLC (STAN.L)
- RSA Insurance Group PLC (RSA.L)
- Merlin Entertainments PLC (MERL.L)
- Anglo American PLC (AAL.L)
- Glencore PLC (GLEN.L)
- Royal Dutch Shell PLC (RDSb.L)
- BP PLC (BP.L)
- Capita PLC (CPI.L)
- Serco Group PLC (SRP.L)
- National Express Group PLC (NEX.L)
- Barclays PLC (BARC.L)
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by Gavin Lumsden on Jul 22, 2016 at 16:24